4 Easy Steps to Improve Your Vendor Selection Process by Using Vendor Profiles
Increase the odds of finding the right vendor for your next big procurement
If you've hired employees in your career you know that one of the first things you do when starting the hiring process is to craft a job description for the position, right? While no one really enjoys putting the description together, most agree that there is value in the process. A job description helps to paint a picture of the type of employee that will best fill that role.
So why is that same mindset rarely applied to selecting a new vendor?
A vendor's success hinges as much on their overall fit with your organizational culture and needs as it does on the products and services they sell. This becomes really important when you procure services and solutions that are more strategic and/or risky in nature, such as information technology, data and professional services. In these procurements it’s as important to select the right vendor as it is to select the right solution.
Here are four simple steps you can follow to create a solid vendor profile that will increase the odds of finding the right vendor for your next big procurement.
- Step 1: Create a Draft Profile of Your Ideal Vendor. When you develop the technical requirements for the solution you need to procure, also create a profile of your ideal vendor. In addition to profiling basic requirements like industry specialization and service capabilities, be sure to also include other important criteria related to things like operational risks, account management and reporting. Think about all of the components that will drive success for your relationship with the vendor, and outline those in the profile.
- Step 2: Vet the Profile with Stakeholders. Engaging key stakeholders in the process is critical. If they weren’t involved in creating the draft vendor profile, be sure to include them in the review and refinement process. Different stakeholders have different objectives and needs, so it’s critical to get their input and refine the profile based on their feedback.
- Step 3: Integrate the Profile into your Competitive Solicitation. Use the vendor profile to craft your solicitation or request for proposal (RFP). This ensures you are clear about the type of vendor you’re looking for, and that prospective vendors can evaluate whether or not they are a good fit for your organization. Certain vendors may self-select out of the process. Don’t worry – this is actually a good thing. Just remember - more is not necessarily better when it comes to finding the right vendor.
- Step 4: Use the Profile as Part of your Vendor Evaluation and Scoring Process. Finally, use the vendor profile to establish criteria you can use to consistently evaluate and score ‘vendor fit’ across all of the proposals that you receive. I have on many occasions selected a vendor that costs more but is a much better fit for our company or for our clients. And it’s been the right choice nearly every time.
So, the next time you have a competitive bidding situation that requires a formal solicitation or RFP, spend some time defining who you want to work with as well as what you want to buy. You’ll find the ROI on your time and energy is well worth the effort.
Tom is Founder & CEO of Vendor Centric, a consulting firm that helps organizations adopt a risk-based approach to vendor management. Connect with Tom on LinkedIn or drop him a note at email@example.com.